- Original Poster
- #1
Hypothetically speaking if I had a business of around 1500 shareholders and lots of shares still to be sold as we are still fund raising, could I run a subscription service with those subscribed being eligible to win monthly prizes of more shares?
Essentially the business has been operating but at a loss. The burn rate is quite high. The seed money is dwindling away. There’s prospects on the horizons but the nature of the industry means deals move slowly. This is all irrelevant to the question in hand but to provide some back story.
Instead of asking shareholders to keep putting their hands in their pockets to get us to the next milestone we are thinking of creative ways to get the seed money in so everyone wins. Naturally shareholders cannot be paid out until a profit is made and we won’t make a profit until we get another few contracts signed.
Usually it’s the same 100-150 shareholders who will dig deep and put money in. We are thinking of a subscription service of say £50 a month which prizes each month for 3 or so winners selected at random using a random number generator. If we had 1000 people sign up to that it would easily plug our expenditure for our burn rate and we could continue operations to get the business deals across the line.
For context the last deal took nearly 2 years from first sit down to money coming in. It’s just the way it is.
What’s the legality here? Is there a way this could work? Does each “subscriber” need to be given a fraction of a share? If we can’t give away shares can we give away cash, which could then be used to buy shares?
Are there any other ways we could raise funds for the long term?
Thanks,
Rhys
Essentially the business has been operating but at a loss. The burn rate is quite high. The seed money is dwindling away. There’s prospects on the horizons but the nature of the industry means deals move slowly. This is all irrelevant to the question in hand but to provide some back story.
Instead of asking shareholders to keep putting their hands in their pockets to get us to the next milestone we are thinking of creative ways to get the seed money in so everyone wins. Naturally shareholders cannot be paid out until a profit is made and we won’t make a profit until we get another few contracts signed.
Usually it’s the same 100-150 shareholders who will dig deep and put money in. We are thinking of a subscription service of say £50 a month which prizes each month for 3 or so winners selected at random using a random number generator. If we had 1000 people sign up to that it would easily plug our expenditure for our burn rate and we could continue operations to get the business deals across the line.
For context the last deal took nearly 2 years from first sit down to money coming in. It’s just the way it is.
What’s the legality here? Is there a way this could work? Does each “subscriber” need to be given a fraction of a share? If we can’t give away shares can we give away cash, which could then be used to buy shares?
Are there any other ways we could raise funds for the long term?
Thanks,
Rhys
